DIY Online vs Hiring a Broker When Selling Your Business
BY: SUMEET MANHAS ON MONDAY, JUNE 18, 2018
Selling a small business might serve as a curveball for most small business owners as it requires to dive deep into thoughts regarding where, how and to whom they're going to sell their business. Initially, it might seem like hiring a broker can serve as the best way out at a time when you have your hands filled with other business chores. It can thus take away a lot of stress from your shoulders as the brokers look after the sales listing and advertising process through digital marketing and various brokerage networks. Thus, the news about your business reaches a wide plethora of potential buyers who can thereafter contact you with purchase proposals. Buyers can also inquire for further information on viewing your listing, all of which will be addressed by the broker representing you. However, all these services will be provided in exchange for a hefty commission, which is usually fixed at 10% of the final sale price of the business on an average. Brokers might even levy some additional fees on a case to case basis which is revealed before you sign an agreement with them.
If the idea of paying a bulky commission doesn’t suit your needs, then you can proceed with the cost-effective method of selling the business by yourself. You will thus have to handle the aspects of the sale process by yourself, which might feel pretty cumbersome since you will have to communicate directly with buyers by answering their questions. Rapidly evolving technology has brought us face to face with new techniques of selling a business without having to hire a broker or working endlessly coupled with DIY platforms such as ExitAdviser. You can calculate the estimated value of a business, create a sales memorandum and sales listing as well as publish the same in the marketplace aided by such tools which encompass all the tasks related to selling your business.
·Problem With Brokers
Business brokers usually like to take up bigger accounts worth more than million dollars given the higher share of commission they can shell out of the same. Thus, the brokers might not pay equal heed to your small business which is not the case with DIY platforms that proceed with the sales listing devoid of any discrimination. Business brokers will at the very max communicate with a handful of prospective buyers and publish your sales listing using a premade template. Given such a scenario, hiring a broker and paying him a bulky commission surely does not seem very ideal. Small business owners can any day benefit by opting for the DIY route rather than seeking the help of middlemen.
Prior to selling your business, you might be required to cater to your liabilities and seeking the help of a broker can just add up the towering debts. The brokers might not be financially or emotionally attached to your business thus investing just the bare minimum time and energy for selling your business to prospective customers. Instances are not rare when a business was listed on the market for years but could not find good buyers. Even if you feel that your broker is not working effectively, it might feel difficult to discard his services halfway as a contract is usually signed at the very onset giving them the exclusive permission of managing the sale of your business. Thus, you will become legally obligated to avail of the broker’s service even if you manage to find a buyer by yourself.
Advertising about the sale of your business might not seem to be very complicated once you get to understand the intricate dynamics of the online tools. Business owners can easily find new buyers coupled with the power of the Internet and the right amount of money. These platforms serve as advertising portal for business owners and generate revenue from the listing fees which is paid by the owners for advertising their business sale.
Online DIY solutions can provide us with legal templates, online tools, routes to market and near-by advisers to ease out the selling process. You can list your sale directly ahead of the prospective buyers who are seeking out businesses like that of yours by running advertising campaigns through Google Search engine in a hassle-free manner by following the steps mentioned below:
- The readiness, timing and sale ability of your business needs to checked primarily. Once the same has been determined you need to decide on the right way for communication your sale decision to the potential buyers.
- Using Business Valuation Tool you can bring an objective edge coupled with the tried-and-tested DCF method, which can defend the price you have decided to state to prospective buyers.
- The Sales Memorandum Tool on the other hand can focus on key factors which might be of great help in catering to the queries of buyers. Fields within the Landing Page of your Google advertising campaign gets auto-populated while writing the Memorandum of Sale.
- The Go-to-Market tool presents your offer ahead of the buyers thus diverting potential buyers towards your Landing Page. The Online tools place your offer ahead of the buyers by establishing intelligent connectivity with the Google AdWords platform. This can be a dynamic means of addressing prospective buyers as they usually seek out the queries and concerns over Google in the first place.
- A complete set of legal templates and forms is provided by the online tools for being downloaded and used in offline mode. A Letter of Intent needs to be sought out from the buyer for establishing his commitment towards purchasing your business. This needs to be followed up with due diligence, detailed negotiations and obtaining the signatures over the target outcome from both parties on a business sale agreement.
You can proceed with the Talk-to-Advisors tool if you wish to utilize the services of an attorney at the final stage. If you proceed in the right manner, then you can easily sale your business by yourself without having to scrape away bulky portions from your share.
Image via Shutterstock